Review of Ag Growth International Inc.

JUL 16, 2024 - The company operates through two segments: farm and commercial. The Farm segment offers products such as grain, seed, and fertilizer handling equipment; aeration products; grain and fuel storage solutions; and grain management technologies. The commercial segment deals with large-scale storage and movement of grain through the food supply chain, including equipment for food processing, rice milling, feed, and fertilizer. Recent quarterly results were not positive, however, AFN reaffirmed guidance with a positive outlook for the second half of the year. We think AFN continues to have some fundamental risks due to debt, while also operating in a cyclical industry. The valuation is very cheap right now and would be very attractive if the company were to enter an ‘upcycle.’ We are maintaining our rating of a B-.